Blackstone Funds Buy 31,000 Flats in Germany

FRANKFURT-Real Estate Funds advised by the Blackstone Group of New York have acquired the entire multifamily portfolio of locally based WCM Beteiligungs- and Grundbesitz-Aktiengesellschaft, which has been burdened with a heavy debt load. The portfolio consists of 31,000 apartments mainly in Northern and Western Germany. Around 9,500 of the apartment units are in the Kiel region, with another 11,400 in and around Bremen, 3,800 in Wuppertal, roughly 5,800 in and around Monchengladbach and 500 in other regions. The average size of the apartments is approximately 678 sf. Blackstone’s real estate group has raised five real estate funds with total committed capital of around $6 billion. The WCM acquisition is the funds’ first residential property investment in the German market and their fourth property investment in Germany overall. Last year, Blackstone real estate funds acquired a portfolio of office properties from Deutsche Bank for approximately euro 1 billion and have made two hotel investments with the Nikko Hotel/Deutsch-Japanisches Center in Dusseldorf and the Marriot Hotel in Munich. The transaction reduces WCM’s debt load to euro 200 million from euro 1.4 billion, company officials say in a prepared statement. WCM will incur an operating loss this year of more than euro 10 million, mainly as a result of exceptional charges from the deal, according to the statement. According to published reports, Blackstone’s next Germany acquisition target is the real estate holdings of the retail group KarstadtQuelle. The portfolio’s value is estimated to be euro 2.8 billion.